THE PRINCIPLES OE FINANCE, 


BY 


VICTORIA C. WOODHULL, 


DELIVERED AT 



COOPER INSTITUTE, NEW YORK CITY, 



NEW YORK: 

WOODIITJLL, CLAFLIN & CO , No. 44 BROAD STREET. 



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THE PEINCIPLES OE FINANCE, 


MONEY! IS IT A PRINCIPLE OR A PROPERTY? 


To the careful student of history, there is a very great deal more 
to be considered than the mere political facts that stand as land¬ 
marks along the path of progress which the nations have traversed 
since the plains of Iran poured forth their hosts westward. These facts 
are the mere externals that adorn the pages of historic lore, and 
embellish the memories of the great men who have lived in and moved 
the world at various times in various nations, or which clothe the 
lives of tyrants and usurpers with their just reward. 

The superficial student of history cares only for the results of the 
evolution of nations—for the fact that Sesostris was the greatest of 
Egyptian kings; or that Semiramis rose by her military sagacity from 
the rank of a mean official’s wife to be, first, the Queen of Ninas, 
and afterward to be the Assyrian Queen, who should march an army of 
three millions men across the Indus to conquer the Indian King. 
Running down the course of events, he traces the rise and fall of 
nations—after Assyria then Egypt, next Persia, Greece, Rome and then 
the Dark Ages, out of whose womb was evolved modem Europe; 
and, lastly, the birth, development, struggle and recovery of the most 
remarkable nation which has yet arisen in the world. 

Rehind these facts, which are but results, lie the real motor powers 




4 


of history; and they are deeper, broader and more important than is that 
which they evolve. There is an external and an internal phase to 
everything existent in the world. Up to this generation the external 
has apparently borne the more prominent part in determining what 
should be next. But now the analytic age has begun, wherein facts do 
not suffice ; wherein new systems, new theories, new philosophies and 
even new religions are constructed, not by an examination of the errors 
of what has been, but by the discovery and application of the principles, 
the powers, which underlie those errors. 

Heretofore there has been no inquiry made by the rulers of the 
people into the general principles of government. It was sufficient that 
there was a government maintained, the governors caring for little but 
the power to compel the people to do their bidding. But it is begin¬ 
ning to dawn upon the minds of those who have something more than 
a selfish interest in humanity that there is a science of government; 
aye, even that there is a science of society: and such minds are endeav¬ 
oring by the deepest researches to discover the principles of these 
sciences. 

In our government, the principle of individual rights is theoretical¬ 
ly held, though in its application government still interferes with those 
rights. The legitimate functions of a government, based upon the rights 
of every individual over whom its power is exercised, are limited to the 
duties that will best subserve and protect the interests of individuals. 
The proper understanding and practice of these functions is the most 
important thing for a people to arrive at, but, having arrived at this as 
the basis of all the relations of the people, the scientific construction of 
the various departments of the complete superstructure which is to 
cover all the public interests of all the people, as well as to maintain 
their private interests intact, can be begun. 

After the general principles of government are properly formulated 
in Constitutions and vitality given them by laws, a correct, a scientific 
financial system stands next in importance. If a country have a true 
system of government , and do not have a true system of finance , it can 
never attain to any permanent prosperity. Literally speaking, finance 
is a part of government; since, in organizing it, means for its support 


5 


4 

are among the first considerations. Hence it is plain, if there are prin¬ 
ciples of government, so must there also be principles of finance. 

It has never been pretended, so far as I know, even by the pro- 
foundest political economists, who are sticklers for the gold standard, 
that any financial systems the world has ever known were developed by 
the scientific application of self-evident truths, which is the nature of 
principles. 

The various systems of which use has been made were simply expert 
mental , devised for politic reasons, as the best methods to meet the 
exigencies of the times in which they were required. Instance the 
Greenback, the necessity for which was such as to shake the nation to 
its very centre, and to fill the minds of all patriots with a dread fore¬ 
boding. 

If there have been no scientific money systems in vogue, and it now 
comes out that the world has arrived at that degree of advancement 
wherein policy should give way to principles , even in finance, there can 
be nothing gained by going back to review the errors, failures and 
fallacies of the past. Nothing valuable can be gained by wading 
through the almost innumerable statistics which have accumulated to 
a sufficiently great extent to bewilder the most comprehensive intel¬ 
lects. Having for ten years been deeply engaged in studying the prin¬ 
ciples of government, I learned that no system of government could be 
perfect unless its financial department was perfected j therefore I have 
frequently endeavored to solve the financial problems which statistics 
propose, but invariably failed to learn anything that even promised to 
look well as a basis for a new and improved system, to say nothing of 
its promises in operation. 

The conclusion was inevitable, that there have been no acknowl¬ 
edged or even known, fundamental principles of finance operating in any 
of the many systems of the many nations, and that the so-called money 
V of the world is not now , nor ever was , money, in the scientific sense of 
that term. 

All the statistics, failures and errors of the past, with which the 
history of money abounds, being of no value, must be utterly ignored 
in any inquiry which proposes to predicate a natural and scientific 


6 * 


money, as distinguished from arbitrary inventions, devfsed to meet the 
various exigencies of nations in their growth, prime and decay. And 
any person who proposes to teach finance, or a new system, by array¬ 
ing before you the evidences of the past, contained in figures amounting 
to billions of dollars, simply proposes to try another experiment , to cul¬ 
minate in another failure. 

Therefore I shall present no principals, per cents, and compounded 
amounts, except, perhaps, as examples to illustrate the mathematical 
impossibilities of the fallacious theories by which financiers have at¬ 
tempted to dazzle the world, but who have only succeeded in accumu¬ 
lating in the hands of a very select few that which by an exact justice 
should belong to, and be distributed among, the people generally. 

In order to intelligently discuss and arrive at legitimate conclusions 
regarding the question of money, it should be first determined just what 
is to be involved in the discussion; for around this, as around all other- 
general things, there has been such a mass of rubbish and extraneous 
matter aggregated that the main question is always in danger of being 
lost sight of, unless this be first removed and the real issue left clearly 
exposed. - 

Most of the confusion which follows the attempts to solve the mon¬ 
ey question arises out of the fact that the same words in the mouths of 
different people do not mean the same things, or that different words are 
used by different people to mean the same thing. If there are two words 
in common use to represent similar objects, but which, upon close anal¬ 
ysis, do not represent precisely the same thing, it is better that one of 
them be discarded. It is necessary, therefore, to settle, prior to the 
beginning of this argument, precisely what the _ several terms do mean 
which are prominently in use in connection with the money question. 
It is, perhaps, near the truth to say that this settlement is the argument 
Very few persons have any well-defined comprehension of what is the 
real significance of the terms gold, money , currency , intrinsic value and 
wealth. If these words are analyzed, what do they scientifically repre¬ 
sent ? 

Gold is a product of the earth only to be originally obtained by labor 
and expense, and both practically and scientifically bears like relations 


7 


to labor that all other things do which are produced by labor; and none 
other. But there has been an importance attached to gold which has 
not been accorded to any other product of labor. It has been coined 
and called money, because it was coined, and by custom and common 
acceptance made an arbitrary standard of value, which none of its qual¬ 
ities warrant when subjected to analysis, as will be shortly shown. 

Gold bears the same relation to real money that a religious theory 
bears to real religion, which theory, when comprehended by the intel¬ 
lect of the people, loses its value as a substitute for real religion; but 
which, until comprehension comes, it is better to have than to have none 
at all. So also with gold. It has in theory been considered as money; 
but when a true money comes to be comprehended, it will lose its value 
as a substitute therefor, and sink to its proper sphere among the other 
products of labor. 

It is altogether probable that gold was the very best substitute 
for money during that part of the world’s evolution wherein people 
were guided and controlled by policy and before principles were recog¬ 
nized as that which should govern, let their action lead where it might. 
As the world is now beginning to act from principle , for the sake of the 
truth, so also must they now begin to formulate the principle of 
money for the sake of the principle. 

"Wealth is whatever is produced by labor which adds to the com* 
forts , the happiness or the life of man; and everything that does this, 
either directly or indirectly, has intrinsic value—that is, has the capac¬ 
ity to bless mankind. 

Wealth may, and should, be divided into two kinds, namely, per¬ 
manent wealth and transitory wealth. 

Permanent wealth consists of all those products of labor which are 
not themselves transferable into life, comfort or happiness, but which 
may at all times be exchanged for that which is thus transferable into 
that which can be used to continue life. Gold, silver and precious 
stones are among the best illustrations there are of permanent 
wealth. 

Transitory wealth consists of all those products of labor of which 
direct use is made to maintain life or to add to its comforts and happi- 


8 


ness, and which, by such process, are absorbed into and become a part of 
the life of humanity. Transitory wealth, it will be seen, is much the 
more important of the two, since, if people only possessed permanent 
wealth, their life could not be continued an hour by it, unless there 
were a possibility of exchanging it for the necessities of life. 

It would seem that all kinds of wealth are intrinsically valuable, 
since its various kinds may be either directly used to. maintain life or 
may be exchanged for those which will maintain life. Wealth and 
intrinsic value, then, mean the same thing. 

But what does the term money mean: or has it no necessary sig¬ 
nificance in the inquiry ? 

There was a time when there was no such thing or word as money; 
but at that time there was life to continue, for which wealth was neces¬ 
sary. It seems that wealth had existence before money was thought 
of. Wealth is substance, of which money is the principle or repre¬ 
sentative, but which, in itself, has no intrinsic value. 

Money is an invention made to represent wealth, or value, in order 
that its various kinds may be exchanged with facility, or that they may 
be exchanged without the absolute and direct and immediate receipt 
and delivery of one product of labor for another product of labor. All 
the products of labor may be exchanged directly , and without the use of 
any representative or go-between, which for the time being stands rep¬ 
resentative of the one or the other, but not so well at all times and 
under all circumstances. Money is anything which stands representa¬ 
tive of any product of labor; that is, that can be made use of to facili¬ 
tate the exchange of any of the results of labor, which are wealth. A 
representative of anything cannot be the thing itself, therefore, if money 
is a representative of wealth it is not itself wealth. Were A, B and 
C to at all times exchange their products between themselves by 
direct transfer , they would have no use for money ; they would exchange 
—deliver and receive —actual values. But when A desires from B some 
of his products, himself not having on hand any of his products which 
B desires, he receives from B his value and gives him his representative 
of value—his note—promising that at a future time he will deliver B the 
actual value which he desires. 


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Currency is only a form of money, the same as gold is only a 
form of wealth; and in the same manner that gold is wealth, is cur¬ 
rency money. Money being the principle of representation in exchange, 
everything of which use is made to facilitate exchange in the form of 
representative value is money. Anything which can be transferred 
from one party to another, anything that is negotiable which is not ac¬ 
tual value of itself, is money. This includes not only all currency, 
bank notes, but also bills of exchange, the ledger and bonds. These 
are all representatives of wealth, all demands for payment at a future 
time of a certain specified sum, and consequently are money. It is 
quite evident that, with the terms wealth and money , we have all the 
necessary distinctions which should enter into the abstract question of 
finance. All other terms are but names for separate kinds or forms of 
these terms, to be made use of when they respectively arise in making 
exchanges. 

Now, every one must at once concede that that which best represents 
all of the products of labor will also best exchange them, and is there¬ 
fore the best money. It is equally clear that gold in no way represents 
any labor but that which produces it. If gold were a true representa¬ 
tive of the results of all other labor, except that which produces it, 
would it not also be apparent that such labor must be equal to all other 
labor. Were gold a thousand times more valuable than it is held to be, 
it would not even then be able to represent all other values. Therefore, 
gold is a false standard of value, a false representative of wealth. 

Many people think and speak as if gold would be of no use to 
this country if it were to come into disuse as money ; that we should en¬ 
tirely lose it as wealth; the very reverse is really true, since we 
should have just the same quantity of gold that we now have, to be 
used for the same purposes for which it is now required, to wit: to ex¬ 
port to other countries in exchange for imports. 

Suppose our imports to amount to a thousand millions dol¬ 
lars per annum, and that we export cotton, corn and pork to 
that amount, what use would we have for gold except to loan other 
countries, and could we not loan it as gold , taking their representatives 
of value for it equally as well as though it were coined into money, 


10 


having the seal and stamp of the government ? It is well known that 
we do not export gold to Europe as so many American dollars, but 
as so much gold, by weight of a certain degree of fineness, the stamp 
of the government attesting to that degree. 

Again : Suppose that we had no cotton, corn or pork to give in ex¬ 
change for our imports, and that we produced a thousand millions dol¬ 
lars’ worth of gold per annum, should we not be equally well conditioned 
to trade with Europe ? 

It is seen that the real character and qualities of gold are the same 
as are those of any other product of labor, which we can exchange 
direct, for other products of labor which we want more than we do 
the gold. If at any time the balance of trade is against us, and we have 
no cotton, corn, pork, gold or anything else to make it good, we must 
then make it good by our representatives of value—our bonds—to be 
converted when we shall have these products. This process has been 
actually going on ever since we began to export bonds, either national, 
state, county, city, railroad or bonds of other incorporated companies. 

Now, is it not perfectly evident that we have not only produced by 
labor what we have exported, which we have been pleased to denom¬ 
inate merchandise, but also that we have produced all the gold that 
has been exported; and in this connection is it not just as much an 
article of meichandise as is either cotton or corn ? Gold cannot at one and 
the same time be both money and merchandise. If gold is money, so 
also is wheat , cotton and corn money, since they perform the same services 
and possess the same qualities as merchandise that gold does. 

To be perfectly clear in our conclusions, money must be resolved into 
its uses, and entirely divested of all its fictitious and irrelevant relations. 
The fact that money is that thing which is made use of to exchange 
real values must be the initial starting-point, of which sight must 
never be lost until it is definitely settled what will best perform this serv¬ 
ice. Anything which can be made use of for any other purpose what - 
ever , is not the best thing to be made use of as money; because the de¬ 
mand for such a thing for such other purposes destroys its positive value 
as money by causing fluctuations in its exchanging power. 

It is a grave financial error for this country to endeavor to return 


11 


to gold as money. All the practices under the gold standard have been 
positive and ample refutations of the arbitrary value accorded to gold 
A dollar in gold can only exchange a dollar in value in any other sub¬ 
stance ; and the practice of issuing a greater amount of bank notes than 
the bank has gold dollars to redeem them by, is a legalized system to rob 
the people; since it is evident that a bank having three hundred«thousand 
dollars in notes in circulation, and only one hundred thousand dollars 
in gold in its vaults, can redeem but one-third of its circulation if it be 
all presented at once for redemption. All the other securities of a bank, 
such as its discounts, personal property and real estate, may become of 
no value, or may be placed out of reach of the holders of its circula¬ 
tion, so that the only real security for its circulation is what it may have 
in gold in its vaults. Beside, what right has a bank to receive legal 
interest on three times the amount of its real security ? Is not this a 
most transparent method of swindling the people ? Hence I assert that 
the use of gold as money always results disastrously to the producers 
of wealth, and always beneficially to those who are permitted to absorb 
all their productions. 

Another unanswerable reason why gold cannot answer the re¬ 
quirements of money is found in the degrees of value which belong to 
different products of labor, and which are universally determined by 
the sacrifice required to produce them. That is to say, all other things 
being equal, the relative value of products is determined by the time 
and labor required to produce them The increase in the value of man¬ 
ufactured material is in exact proportion to the time required and 
wealth consumed in their manufacture. The value of gold is deter¬ 
mined in precisely the same manner ; and it is simply foolishness to as¬ 
sert that the value of gold never changes, or that it has the same pur¬ 
chasing power at all times. 

Suppose there should be immense fields of gold suddenly developed 
all over the country, so that it would become as common and plentiful 
as iron or coal, would it not decrease in value in comparison with 
other products ? That is to say, would an ounce of gold then possess as 
great a proportionate value to other products as it now does ? No one 
will pretend it Then gold is just as much the subject of fluctuation as 


12 


is any other product of labor, and for just the same reasons—demand and 
supply—which are the great arbitrators of values in all parts of the 
world. 

Everybody knows that for a certain quantity of gold a certain quan- 
tity of cotton may be obtained, and for a certain quantity of corn a horse. 
The fact that the horse is obtainable by the corn does not convert the com 
into money, neither does gold any more than the corn become money be¬ 
cause the cotton is obtained thereby. The gold for the time is equal in 
value to the cotton, and so is the corn to the horse. Now. what is required 
of money is this: Suppose the gold, cotton, com and the horse to be of 
equal value, a person possessing an amount of money representing the 
value of either of the four can, at his discretion, purchase whichever he 
may choose ; since the money would equally represent the gold, cotton, 
corn and the horse. Anything that may be used for money that will not 
do the same thing for any variety of the products of labor, values being 
equal, is not money in any sense of that term. 

Incidentally in this connection, because it has an indirect bearing 
upon the question under consideration, I wish to call attention to a 
mistake that has been productive of more financial ills and consequent 
injustice to a large proportion of the people, who are the wealth pro¬ 
ducers, than any other single cause, and that is the fundamental error of 
making land, wealth, which it is no more entitled to be, scientifically, 
than gold is to be called money. Wealth is that which is produced. 
Land exists. All improvements made upon land are wealth ; but the 
land proper, never. 

In this almost fatal mistake—almost fatal to the humanitarian in¬ 
terests of the so-called common people—which is fundamental in its na¬ 
ture, is found the basis upon which rest the vast disparities in the dis¬ 
tributions of wealth, and which gives to certain favored individuals the 
means of realizing vast fortunes without ever resorting to the produc¬ 
tion of wealth, or of even accumulating it by trafficking in the different 
kinds of wealth. 

There are numerous examples of this manner of becoming pos¬ 
sessed of riches. People acquire title to lands which, by favorable 
location, come into great demand and consequently rise in value from 


13 


one dollar per acre to hundreds of thousands of dollars per acre. By what 
principle of equity and right should any person be entitled to such vast 
increases in capital invested in land, when it is entirely attributable to 
the movements of the community which produce it, and in no single 
particular to the individual ? To be so entitled is for the individual to 
possess advantages over others to which no just communal government 
should for a moment consent—is to have the right to appropriate to self 
the results of labor which belong in common to all the people. Such 
results are against all principles of equity and justice, and is one of 
the greatest , if not the greatest error of the present, regarding the equities 
of property, and is the foundation and prophecy of all other kinds of 
monopoly. 

It occurs to me that an objection may be raised to my argument 
classing gold as wealth, and defining wealth to be that which can be 
made use of to minister to life, comfort and happiness; or perhaps to 
the distinction of permanent and transitory wealth. Gold, as perma¬ 
nent wealth, can only minister to man through its exchange for other 
valuables of which direct use can be made. It may be said that in that 
sense gold can legitimately be money. 

But if there are objectors to this argument, I beg to call their at¬ 
tention to the conclusive fact that gold can never be representative of all 
other kinds of wealth. It is just as impossible that it should be, as it i3 
that a bridge one hundred feet in length should span a river five hun¬ 
dred feet in width. It must further be remembered that the uses for 
which money is required demand an invention which can be made use 
of for no other purpose whatever, and that money is the name of an in¬ 
vention demanded and made for the purpose of facilitating exchanges— 
for making them easy, convenient and adaptable to all conditions of all 
persons. 

Every attempt ever made to compel gold to answer the demands 
of money has been a disastrous failure. So long as a country enjoys 
continuous prosperity under a gold standard of value, it is all well 
enough. The people make use of an expanded volume of currency in 
the full faith that prosperity will continue and everything be smooth 
and right 


14 


But anon a change comes, the nation is precipitated into conditions 
which require more than its accumulations of gold to meet That being 
exhausted, it is inevitable that representation be resorted to. The 
wealth in the form of gold not being adequate, and other wealth not 
having been used or accepted as money, paper representatives of it are 
the only resort So it appears that when an emergency arises the people 
are involuntarily pressed to the use of the principle of representation, 
which is the only scientific thing that can be called money. So that 
while a paper representative of wealth is, with everything else , a product 
of labor, it is more than that; it is the embodiment and application of 
a principle, which other products of labor are not; and all principles 
are fundamental; are the basis of all permanent and all purely scien¬ 
tific things and truths, while wealth is the realized product of the out¬ 
working of principles, directed and appropriated by man for his use 
and convenience. 

The direct inquiry can now be made as to what w^ll best perform 
what the people require of money; and money is that which can be 
used to represent real values without an absolute transfer of such valuea 
The basis of all value of this country is our present accumulated real 
wealth and our capacity to increase it, and this accumulation and the 
prospective increase may be wholly represented by money and the na¬ 
tion never become bankrupt. 

A person may possess wealth to the amount of ten thousand dollars 
upon which he may issue his representatives of value, or promises to pay 
that value. These representatives 01 value would circulate among 
those who believe in the capacity and intention of the utterer to give 
up to them, when demanded, that which they represent. Everybody by 
his individual right has the authority to issue such representatives ot 
value, and no government has any right to prohibit their circulation; 
because the people, as individuals, have the right to take or refuse 
them. The issue of bank notes is upon the same principle, and so 
long as the government does not in substance indorse these issues, the 
people have the perfect right to deal in them—to receive and deliver 
them. 

But there is an insuperable objection—one which cannot be over- 


15 


come by any governmental requirements—to these representatives being 
called the real money of the people, since circumstances over which 
neither their utterers nor receivers can have any control may render them 
valueless—may make it impossible for those who uttered them to re¬ 
deem them—and their holders find themselves with bits of paper repre¬ 
senting nothing ; but for which they parted with real value. 

So far as this condition is confined to individuals who had no 
other reason for receiving them, and no other assurance of their real 
value than the supposed capacity and intention of the uttering person or 
persons, it is strictly a legitimate condition; and one with which the 
sufferers can find no fault; since of their own free will and choice they 
received the utterers assurances that his representatives were of real 
value. An individual upon his personal judgment, without undue per¬ 
suasion, accepts another’s representative ; if it prove bad he has him - 
self only to blame for the loss, as coming from an error of j udgment; 
and no power or authority has any right to step in to compel the making 
of amends for this error. This is the simple doctrine of the rights of in¬ 
dividuals , with which no third party has any right to interfere alter the 
occurrence of the fact. But wheA banks are organized under certain 
formula of law, framed by the people or their representatives through 
government, the people receive and pay out their issues—representatives 
of their value— not because they have special confidence in the capacity 
and intention of the individuals who compose the management, but be¬ 
cause they suppose the management has conformed to those certain forms 
of law which are intended to render them safe. In this way the govern¬ 
ment, at least indirectly, gives credit to the bank, and currency to its 
issues, and the people accept them simply because the government has 
done so. 

But if these banks are mismanaged either ignorantly or intention^ 
ally, or managed by designing men, as often they are, who make use 
of the governmental sanction to swindle the people, as many times they 
have, where can the people look for redress ; where should they look for 
redress? The government is justly responsible to the people for all 
such issues, since it did not require real security from the banks, and 
government should make reparation therefor. 



16 


This is precisely our objection to any and all forms of bank issues. 
There can be no arrangement made so perfect in security to her people 
as to guarantee them absolutely against all hazard, that will permit the 
banks to make the profits which they seem to think they are entitled to 
make from the people. In absolute security there can be no profit. 
Bank profits demand the circulation of more notes than they have real 
value to represent Profits come only from speculating either upon the 
confidence or the money of the people, and government has no right to 
protect such illegitimate and unjust practices. 

Our present system of banking is a swindle upon the people, which 
it is simply surprising that they endure as they have and do. For the 
banks to be permitted to filch from the people twenty-four million dol¬ 
lars per annum is an outrageous villainy which, if comprehended by the 
people in its true light , could not exist another year. ’Tis true these 
banks complied with the law passed in a time of dire necessity, and that 
through them the government acquired the means to conduct the war. 
But did not the people themselves do even more than furnish money, 
which was promised to be returned ; did they not freely give their lives y 
which can never be returned, and which the government never thought 
of promising to either return or guarantee, and that, too, for the pitiful 
sum of thirteen dollars per month ? What comparison is there between 
the sacrifices made by the two classes of people, the capitalists who have 
absorbed the wealth of the country and the laborers who still continue 
to give life, property and vitality to the country. There is absolutely 
no chance for a comparison ; the distinction is too great 

It seems to me that if either class is entitled to superior consider¬ 
ation—to receive millions of the people’s money—it is the common peo¬ 
ple who so freely offered their lives to save their country, instead of 
those who simply loaned their money at enormous rates of interest, 
with the certain knowledge that it would be repaid. The present 
claims are too preposterous, and deceptive, and too unjust to be long 
continued. 

All bank notes in their ultimate effects are frauds upon the people, 
and their continuation as a circulating medium is only possible because 
inat part of the people who suffer from them have not yet risen into a 


/ 


17 


proper understanding of the question. The time is, however, near at 
hand when those who have reveled in the result, of the wear and tear 
of the muscle, and the sweat of the brow, of the common laborer, will 
be compelled to produce honestly and equitably everything they would 
enjoy. 

The substitute for all kinds of bank notes as the money for the 
people should be a 'purely people's money —a national currency whose 
basis of value would be the accumulated wealth of the country, and 
also its capacity for regularly increasing such wealth. Is there any re¬ 
liance to be placed in a currency issued by an individual or a number 
of individuals through an incorporated bank, based upon his or their 
wealth, which is at all times liable to pass into the hands of other indi¬ 
viduals ? Yes, there is a presumptive reliance—an indefinite security— 
but the security is not perfect. In comparison with this security place 
that of a currency issued by the government, based upon the entire 
wealth of the whole country, which, no matter how much it might be 
changed about among the different persons comprising the nation by va¬ 
rious contingencies, could never depart from the country; which fact 
would render it safe under any and all contingencies that could possibly 
arise, excepting alone the entire destruction of the country and its gov¬ 
ernment by a foreign power; which contingency is not sufficiently im¬ 
minent to cause any present alarm. 

A national current thus based would have not only all the gold of 
the country as a basis, but also all other hinds of wealth. Is it not per¬ 
fectly plain that such a money would be j ust so much better than 
common bank notesj with a one-third gold basis, as the total amount of 
the wealth of the country is greater than such amount of gold ? It 
would be in the most complete sense the people’s money. It would be 
a system of mutual banking wherein every individual of the country 
would have an interest, instead of there being a vast number of 
mutual banking institutions, such as has been proposed by a person of 
profound financial ideas. 

As before stated, my objection to all systems of individual bank¬ 
ing is that the basis of their issues is at all times liable to pass from the 
possession of such individuals; whereas, in a national currency—the 


18 


money of the people, themselves in the aggregate the basis and security— 
there could be no such liability; since, if parts of the security pass from 
original to secondary hands, it is still the basis of the currency, and 
could never be transferred beyond the jurisdiction of security by the 
operations of designing or incapable persons. By no possibility could 
there ever a loss occur to the holder of such a currency, except it be 
destroyed in his hands. 

Undoubtedly the greenback was the nearest approach to a real money 
that any people of the earth ever made. We have only to observe how 
admirably it has answered nearly all the purposes for which people re¬ 
quire money, to be convinced that it has the very best—the most secure 
—basis that it is possible for a money to have. It stands representative 
of the capacity and willingness of the government—the representative 
of all the people—to pay. 

But it is one of the most difficult of things for the people to divorce 
their minds from the idea that gold is the only possible, real money. 
Yet the facts attaching to the greenback stand out in bold and indis¬ 
putable relief, perfectly and entirely dispelling all basis for the idea. 
Because the greenback was the first step toward a real money that the 
country ever took, which left gold entirely out of the question, the im¬ 
pression still remains with the people that a return must be made to a 
gold basis; never stopping to observe how vastly superior the wealth 
basis is to what the gold basis would be. 

Bank note currency, or a currency issued by an individual or by a 
class of individuals, always carries along with itself the idea and need of 
redeemability. If, however, there is any thought among the people 
that the utterers cannot meet their promises of redemption, at that very 
time when, of all others, confidence is necessary to avoid ruin , they rush 
to prove the suspected incapacity; and generally they do prove it. 

The idea of, and necessity for, redeemability, is that which most re¬ 
quires to be divorced from money. Money—real money—should never 
require to be redeemed. It should always be just as valuable to retain 
possession of as anything could be into which it may be converted. 
Anything that requires to be redeemed in order-to make it permanently 
valuable or a representative of value is utterly unworthy the name of 


19 


« 


money, because it does not truly represent real wealth It is that cur¬ 
rency of which there is doubt about the real wealth it pretends to rep¬ 
resent which requires to be made redeemable before it will circulate; 
and this fact proves most conclusively that it is not money in any true 
sense of that term: that is to say, it is not that which requires to be 
converted into substance. 

It is readily perceivable that a national currency having continually 
all the nation’s wealth, accumulated and prospective, as its basis, never 
need to be redeemed. This single consideration is of quite sufficient 
importance to alone warrant its immediate adoption and use upon the 
standard of wealth. The gold standard is the flimsiest deception of 
which it is possible to imagine. The people’s talk of approaching a gold 
standard as the ultimate of appreciation is the merest jeu d'esprit Gold 
is now selling at say 113. Suppose that during the next year its price 
should gradually decline to par, or, in the phraseology of the goldites, 
their country’s general credit should appreciate to par, would the process 
of appreciation necessarily stop just at that point? Why should it not 
just as reasonably continue to appreciate, so that in another year 
gold would be below the par of the country’s credit ? This simple 
analysis proves beyond all cavil the arbitrariness of the gold standard 
of value. 

The credit of a country increases or diminishes without any regard 
whatever to its gold producing or paying capacity. It is governed 
by its capacity for the general production of all kinds of wealth over 
and above its average consumption. It is j ust the same with a country 
as it is with an individual; the individual, to become wealthy and to 
have a good credit, must not necessarily ever have any gold ; but he must 
be able to produce or acquire more than he consumes by his general 
expenses. A country must proceed by the same process to become 
wealthy, and it is simply an absurdity for people to talk of the prosperity 
of the country when high 'prices for everything are induced and fostered 
by a system which restricts general production in order that special pro¬ 
duction may flourish. Individuals cannot get rich by rading among 
themselves, no matter if they increase the price of their wares ten per cent, 
every year. Neither can all the individuals of a country do the same 


20 


thing. What is required by both is increase in the quantity of what 
they trade in. 

It is not the price of what a people have that constitutes their true 
wealth, but it is the quantity of their commodities. A barrel of flour is 
possessed of no more real value if it cost twenty dollars instead of five. 

It will not maintain life a day longer, let the price even be a thousand 
dollars. Thus we arrive at the real basis of values—the real wealth— 
and I have introduced this, precisely for the purpose of showing the 
high-priced protectionists that they know nothing about true values or 
true economy, as well as to also show that there is no real wealth except 
that which conduces to higher ends than its simple acquisition. Wealth 
as an end is despotism. Wealth as a means is humanitarianism. 

But to return from this departure to the main subject. For the 
idea of redeemability for money there should be substituted that of 
convertibility. A real money should at all times be capable of being 
converted into that of which it stands representative. And here we ar¬ 
rive at the last analysis of a real money. It will be readily seen how 
completely a national currency meets this requirement It would be 
representative of the productive capacity of the country, and could al¬ 
ways be converted into whatever portion or kind of its products might 
be required ; or into the products of other countries which may be ac- * 
quired by the direct exchange of our own products. 

What more than this can be demanded of money; or what better 
thing invented as money; or what more capable of inspiring and main¬ 
taining an even and legitimate confidence ? 

National currency being the very best possible money, because it is 
not only the most convenient but also the most secure, there remains 
nothing to be done but to continue to so acquaint the people , until they 
become convinced of the rapaciousness of those systems by which 
the large majority are compelled to labor all ilieir lives for the very select 
few. There is no difficulty in arriving at .all the initial points necessary 
to determine the amount required, how it should be distributed and 
kept in circulation, or how its circulation should be regulated... These 
are all practicalities of finance. 

But there is one thing which has never yet received consideration,* 


21 


which is absolutely necessary to make money meet all the requirements 
of money, and at the same time to maintain a fixed and absolute value at 
all times and under all circumstances, which money never has had. 
From its lacking, have come all the various financial convulsions. And 
this is , an absolute measure of value. 

Can money be measured so that the same fixedness shall attach to 
it that attaches to everything else with which we have to do ? Money 
itself has always been considered a measure of value; and it is this false 
stoppage and foundationless position that has made possible all financial 
discords, irregularities and inconsistencies. Does it appear to be a 
strange proposition that money should be measured ? Why should not 
a dollar be just as absolute as a dollar as a pound is as a pound ; or as 
a foot is as a foot; or as a gallon is as a gallon ? A cord of wood con¬ 
tains one hundred and twenty-eight solid feet, or eight cord feet It 
must always be eight feet in length, four feet in height and four feet in 
width, or some other multiples of one hundred and twenty-eight A 
cord can never be any more, never any less than just that measurement 
And the same rule holds of everything else with which we have to do; 
with quantity, time, space and motion. All these have fixed and un¬ 
varying modes of measurement But money, the lever by which all 
these are moved, has been left to fluctuate as it would—to be moved by 
every different influence, so that in many instances what should have 
brought contentment, peace and continuous prosperity, has bequeathed 
the direct reverse. 

It does not concern us that there are more yards of cloth at one time 
than another, provided that yardsticks are all of the same length. But 
what would concern us would be this: That if with increase of the 
quantity of cloth the length of the yard-sticks should increase propor¬ 
tionately ; or with the decrease of the quantity of flour the 'pound should 
decrease in like proportion therewith. Now this is just what has always 
been true of money; its real value increases and decreases , just in pro¬ 
portion as those things which it professes to measure have increased or 
decreased in quantity. Instead of these things being exchanged or 
converted into something measured by as fixed a standard as they are, 
the attempt is made to measure them by something which constantly in - 


22 


creases and decreases in representative capacity. In other words, a dollar 
is not at all times one and the same thing. Sometimes it is but seventy' 
five cents, and sometimes a dollar and a half. That Is? to say that 
seventy five cents ai one time possess the same representative power that 
a dollar and a half does at another time, which is m substance to say 
thai money has no measure. 

Now what is desirabl anc indispensable is to give money a fixed 
measurement , wind shall b. jus: as absolute in its measure oi the value 
01 money as'the pound l, m its measure of weight, or as the yard-stick 
is in its measure oi distance. There never is any more cloth, though 
there be a thousand more yard sticks. Nor is s yard-stick ever any 
longer or shorter, if the quantity to be measured is increased or de¬ 
creased a thousand-fold. Now just to such a fixedness must money bo 
reduced before it will subserve its best purposes and uses, and the only 
way ihis can be done is by that method which wil. also remove the only 
possible objection there can be brought against such a national currency 
as is proposed. This objection is that by over-issues of currency its 
value would oi might be depreciated. 

Let it be supposed that the country’s extremest need to meet 
the demands of the greatest amount of trade is a billion dollars cur¬ 
rency. At certain times there are greater and less demands for money, 
which, undei our present practices, make a dollar, to-day, worth four 
per cent per annum interest, and to-morrow increase - it to ten per cent 
It must be remembered that we are now speaking of an irredeemable 
currency , the representative of the wealth of the nation: that the govern¬ 
ment representing the nation has uttered it, in behalf of the people , upon 
the soundest and, in reality, the only sure basis of value any money can 
have —the productive power and capacity of the nation. 

An over-issue is the only thing to be guarded against The 
government must be prohibited by some absolute law from resorting to 
the process so well known in railroad management as the “ watering 
process .” And this is to be accomplished in the following manner: 
This currency—this money—mus^ be made convertible into a national 
bond, bearing such a rate of interest while m the hands o» the people as 
shall be determined upon as “ the true measure of value’'—say three or 


23 


four per cent—which experience would necessarily determine as the 
true point of balance; and the bond also convertible into currency at 
the option of the holder. 

In other words, the people should demand that the Government 
issue one thousand million dollars in bonds, bearing three per cent, in¬ 
terest, payable in currency, and that it issue one thousand million dol¬ 
lars of circulating medium or money to be loaned to whomsoever deposits 
the bonds as collateral; all loans to be made at three per cent, per an¬ 
num ; to be for six months, with two renewals of three months each, 
one-half payable on each renewal. The principle underlying the time 
being that ah credits should bt settled with each year’s products. 

The operation of such a system can be very easily traced. When¬ 
ever there should be so much currency in circulation that it would be 
worth less than four per cent., the surplus would at once be invested in 
the four per cent, interest-bearing national bond; and when business 
should revive and the demand for money to transact it should make 
money worth more than four per cent., then bonds would' be converted 
into currency again until the equilibrium should be re-established. 
And whenever the demand should be such that all the money 
would be converted, and money still be worth more than four per 
cent., then the government should issue enough to produce the equi¬ 
librium. 

Thus it is seen that the four per cent, or the three per cent, interest- 
bearing national bond becomes the fixed measure of value for money. It 
would always be w x orth just that amount—never any more; never any 
less. The gallon measure always gives just the same quantity of mo¬ 
lasses. The yard-stick always gives just the same quantity of cloth. 
The pound weight always gives just the same quantity of sugar. So, 
too, would this measure of money always give just the same amount of 
real wealth, or its representative, every day, week, month or year, 
whether applied to wealth in business, to bonds, or to money at inter¬ 
est An oscillation would be perpetually maintained; first, conver¬ 
sion of currency into bonds; next, conversion of bonds into currency; 
and whenever the supply of currency should be deficient, then the issius 
of more by the government to meet it Thus there would be a people's 


24 


money regulated to financial equilibrium, which is the ultima thule of 
convenience for exchanging the products of industry. 

It may be remarked, parenthetically, here, that even three per cent, 
per annum interest is altogether too greatly in favor of capital A care¬ 
ful calculation o? interests and general increase of the- nation’s wealth 
discovers that less than a two per cent, interest is required to make the 
capitalist and the laborer stand upon an equality. Had I the time I 
would be glad to present you some figures to show to what condition 
we are tending. I will simply remark, however, if capital continue 'O 
receive the present rates of interest for the next thirty-five years, at the 
end o' that time it will have absorbed all the wealth on the country. 
That is to say, tha* interest compounded at the rate of 6 per cent, upon 
the present Banking Capital will amount to a sum larger than the pres^ 
ent aggregate of wealth together with the same rate of increase which 
has governed it during the past, added thereto. Is not this a sufficiently 
alarming fact to cause people to stop and consider the despotism into 
which they are rapidly merging? 

Everybody who knows anything about the relations of money to the 
people must prefer such a money as we have indicated to any other kind. 
It is really the greenback system extended to all mes for which money is 
required, and to which is given a fixed measure of value. All people at 
present interested in national banks and high interest-paying bonds 
are constitutionally opposed to such a change in our money system. 
This, however, should not deter its introduction and use. The people’s 
welfare is what should be consulted, and mad q the test of all propositions 
that are to become theirs to practice. National banks and all banks of 
issue, with their drain upon the people to make their immense profits, 
must be done away, and banks simply as depositories for the accommo¬ 
dation of the people, alone exist. 

The national bank and other currency would be gradually called 
in at the rate of, say ten per cent, a month. 

I may add in justification of this plan, that if the Government can 
loan three hundred millions to the banks for nothing, it can loan to the 
people for three per cent.; if at the same time it can pay three per cent, 
on its bonds and in currency, instead of six per cent, and in gold, it se¬ 
cures a new-found advantage. 


25 


But one of the chief benefits which would come to the people from 
the proposed currency would be the interest which would accrue to the 
government—all the people—for the use of this money In other 
ivords, all the interest now paid to banks of issue for loans, for the 
saint convenience should be paid to the government. A pan ot the 
people, for the use of money belonging to all the people, themselves in¬ 
clusive, would pay interest to the government therefor And what more 
legitimate method of governmental, suppori. than this, il by it all other 
means of taxation could be annulled ? The interest now paid by the 
people of the country to the Banks and Capitalists would, twice over, 
pay all costs of maintaining the government. A three-per-cent, interest 
paid to the government on all loam the people required would not only 
relieve the people who produce wealth of one-half the interest they now 
pay, but also of all taxes of all kinds. Is not this a matter to be 
looked into in the most serious manner ? 

With such a currency system once inaugurated, the country would 
begin a gradual process of general prosperity. Wealth, insteac of ac¬ 
cumulating in a few hands, would continually tend to an equal distribu¬ 
tion among all producing people. A large part of the speculative mania 
would be rendered futile, and those now devoting all their time to 
hatching schemes by which to defraud the producing classes of their 
wealth would be compelled to turn producers themselves. Miscalcu¬ 
lated that one-tenth of the male population of this country is engaged 
in speculative pursuits. In other words, they ‘ live and grow fat’ from 
those who are engaged in production. And that i* our boasted equity, 
our equality. 

It should be the object of all reform to make a nearei approach to 
a system of complete justice and a perfect equity. Any reform tha* does 
not base itself upon such a proposition and whose outlook is not m this 
direction is no reform, and does no* deserve the serious attention of any. 
There is scarcely an idea prevalent in the community of what true jus¬ 
tice and equity consist. But it may be stated as follows : No person has 
any just claim to the ownership of anything which he did not produce or 
which he did not acquire by an equitable exchange of something which A did 
produce. Tested by this rule, the accumulated wealth of the world is in 


26 


unjust hands; it is held by those who have a no better title thereto than 
if they had actually stolen it. It has been fraudulently acquired, and 
that is the word which best expresses the manner of its obtainment. And 
one of the most effective methods of remedying this growing evil is to 
attain to a true money system—one founded in the requirements to be 
met and based upon that which it is to represent—that which it is to be 
used to exchange. Anything that departs from these standards is not 
scientific money. That which has these for its. standards is a scientific 
money. 

Aside from all that has been said, there is a general principle rising 
into the comprehension of humanity which must of necessity dethrone 
that which has so long been worshiped as the money god. The day 
for arbitrary rule and standards is drawing to a close, whether they be 
standards of materiality or spirituality; of morals or intellect; of des¬ 
potism or democracy. Gold is an arbitrary money standard, and with 
all others of like character must fall. The tendency of the world is 
against it , and its doom is already sealed. It has been weighed in the 
balance and found wanting. 

The interest of the common jteopie, who should always hear every 
new Christ, demands a reform in our monetary and financial systems. We 
are aware, however, that there is a great deal of prejudice in their 
minds in%avor of “hard money,” and they must be awakened to the 
fact that hard money is a myth—a play upon words—a deception prac¬ 
ticed upon them by those who have played the part of “ the appropria- 
tors of wealth ” lo ! these many years, and who would continue to filch 
year after year all that the “ toiling millions” can compel nature to yield 
up to them. In this process the laboring classes are the mere avenues 
through which the earth pours its wealth into the coffers of the capital¬ 
ists. 

Some object that the very numerous and intricate methods to 
which resort would be required would prove unmanageable , and 
that corruption would inevitably creep in and undermine its usefulness. 
Let such consider our almost perfect postal system, and how well bal¬ 
anced are all its movements and checks, and find therein their answer. 
Would there be more intricacy in the proposed system than there now 


27 


is in the present ? Do not all national banks, though nominally 
distinct, really have a common fountain head in government ? Does 
not ffll their currency come from government ? Suppose all these 
banks, nstead of being independent institutions, were an organized sys¬ 
tem, having a common head, as the banks of New York City virtually 
have m the Clearing House, would not that be a condition so nearly 
related to the system which would be required as to show its entire 
practicability ? 

Indeed, there is scarcely need that there should be a new department 
inaugurated to bring such a currency home to the people. Perhaps 
there never was a system operated in which there was less proportionate 
loss through its executive officers than in our postal system. And this is 
because the responsibility comes home to the people. The postmaster is 
always a resident of the place in which he officiates, and, either with or 
without a civil service law, should be the appointee of the citizens whom 
he is to serve; and, of course, would be a person possessing their spe¬ 
cial confidence. To such persons might the care of the public money 
well be intrusted; and in all places except cities a single person could 
perform both the services of postmaster and of United States financial 
agent 

Means can be easily devised to make all post offices offices for loan¬ 
ing, as they now sell post office stamps and money prders. 

In all that I have said my only purpose has been to endeavor to 
0 arrive at a proper understanding of the most important feature of gov¬ 
ernmental justice and uniform equity among all. the people. All past 
systems have failed to secure this. The world has constantly witnessed 
the proceeds of the labors of the millions aggregated in the hands of the 
few. This advantage which one class has possessed over another cannot 
long exist under the rapid spread of intelligence, which marks the pres¬ 
ent generation; and it behooves this people to give due consideration to 
any scheme which proposes to lessen this advantage. And most espe¬ 
cially does it become the duty of the people, if there be such a thing as 
principles of finance } to find them out and cause them to be practically 
appliecL 

In fine, and to resume, the idea of money must first be separated 


28 


from that of the intrinsic value of gold, or any other commodity, and 
confined to the mere capacity of representing all commodities, and so 
of facilitating the exchanges of wealth. This, it has been abundantly 
demonstrated, can be as weir, and for various reasons, better done by 
strips of paper, properly stamped and signed, than by gold or any other 
metal. 

In the next place, these strips of paper, signed by the Government, 
with the credit and. wealth of the whole country, are better than 
individual promises; though the issuance of individual promises should 
not and need not be prohibited, as we do not now prohibit anybody 
from making or receiving private notes, drafts and checks. 

Again, the Government Money need not be redeemable, but only 
convertible into new strips of paper when the old ones are worn out, and 
into commodies when they are used in trade, and into other Govern¬ 
ment Securities bearing interest, as I have pointed out. 

Still again, money has also been held to be a correct measure of 
values. This it ought to be, indeed, but has never been so, because 
it has never been measured itself. Of what use would yard-sticks be, 
used for measuring cloth, but which had never themselves been 
measured by anything ? The system which I have stated for measuring 
money itself is believed to be perfect. It is not the individual dollar, 
relatively to the half dollar or the hundred dollars, that has failed to bo 
measured or fixed ; but the rate of increase relatively to other values, of 
all the Government currency afloat. By the convertibility of any excess • 

of issue sinking its value below a certain standard into interest-paying 
bonds, any over-issue is immediately absorbed, while a deficiency of 
issue will be revealed by the fact that absolutely no bonds will be sold. 

In this manner the whole operation will be self-adjusting from day to 
day; the value of the aggregate of Government money will be accu¬ 
rately measured and kept uniform; and any interest or temptation 
whicli the Government might have to an over-issue would be imme¬ 
diately neutralized by the absorption of such surplus into bonds, upon 
which the Government itself would be paying interest; or, in other 
words, assuming an unnecessary and useless burden, m the face of the 
people and of its own economies. Can anything more perfect be . 


29 


devised ? If so, let us have it by all means ; if not, let this device be 
adopted. A self-adjusting, self-regulating admeasurement of the value 
of money would make it a true measure of other values, and is a sugges¬ 
tion which, if iUjan be secured, is of unequaled importance. 

Another somewhat similar idea was glanced at in passing—that of a 
definite method of determining scientifically the equitable rate of 
interest This I cannot stop now to explain. It will, however, only 
be when we come quite down to that basis, that the full value of this 
financial systen will be experienced. 

Finally, in its basis, this system of Government money is money 
issued at the mere cost of printing and circulating; but by adjoining 
with it the idea of a complete, simple and exceedingly economical 
means of raising the revenue of the country, the three or four per 
cent, is paid to the treasury ; that is to say, by the people individually 
to the same people in their collective capacity. Under this system 
all the various revenue officials and tax assessors and gatherers would 
be dispensed with, and a vast system of economy inaugurated, which, 
in a few years, would transpose us from a borrowing to a loaning nation, 
making us the financial example for all the world. This it also seems 
to me is another invaluable feature of the system, all of which I, how¬ 
ever, respectfully submit to the decision of the people. 

The interests of humanity which are involved in this question are 
greater than are the interests of those who have assumed to rule the 
world, and who are endeavoring to fasten upon the people despotism , to 
escape from which would require the shedding of whole rivers of human 
blood and the destruction of the best evidences of our civilization., for 
which we have a perfect right to feel the greatest admiration. 

A timely understanding of the money question would guarantee 
precisely the reverse of all this, and cause humanity to take still greater 
and more rapid strides toward that perfect enlightenment which can 
alone tho r oughly recognize the common brotherhood of the human race, 
toward which end all reform should be directed. 


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